New Jersey Governor Phil Murphy and state legislators are offering incentives to prevent senior residents from moving to low-tax states.
The lawmakers announced a program Wednesday, aptly branded StayNJ, under which residents over age 65 and making less than $500,000, will see property-tax breaks. The levies will either be cut in half or capped at $6,500. The new program will take full effect in 2026, bridged by an extra $250 tax credit provided over the next several years for senior homeowners and renters through the state’s existing Anchor program.
The initiative is designed to encourage older New Jerseyans from leaving for other jurisdictions that offer lower income and property levies.
“We will continue to work to ensure everyone in New Jersey can afford to live out their best years with dignity and where every family can reap the benefits of their hard work,” Murphy said during a press conference with Senate President Nicholas Scutari and General Assembly Speaker Craig Coughlin.
New Jersey’s sky-high property tax rates have long frustrated residents, and critics say they’re a major driver of people moving out of the Garden State. More residents moved out of New Jersey than any other state in 2022 for the fifth consecutive year, according to data from United Van Lines. About 33% of movers relocated to New Jersey last year compared with nearly 67% of residents who left the state, the study said.
The new program will allow senior-residents to “stay in their homes,” Scutari said. “As they get older they don’t have to consider as easily moving down south where they might see a better property tax rate.”
Murphy also outlined some of the state’s major spending priorities which will be included in the upcoming budget for the fiscal year that starts July 1.
The future spending plan continues the state’s recent trend of making full pension payments, part of Murphy’s goal to boost funding levels. The state’s largest pension fund — the public employees’ retirement system — has a funding ratio of 33.2%, with $9.35 billion of assets to cover $28.2 billion of pension costs for current and future retirees, as of July 1, 2022, according to the most recent actuarial valuation report.
“We will have contributed nearly three times as much to our pension plans as the last six governors combined,” Murphy said.
The proposed spending plan also includes a surplus of around $10 billion, Murphy said. That will help the state avoid spending cuts if the US economy were to enter a recession, the governor told Bloomberg Television earlier this year. Lawmakers are expected to finalize the appropriations in the coming weeks.
New Jersey may need that cushion. State officials last month lowered by $2.3 billion its estimate of gross-income tax revenue collections for this fiscal year and the fiscal year ending June 30, 2024. New York, Illinois and California have also reduced their revenue projections as federal stimulus runs out.
This article was provided by Bloomberg News.